Investor Overview

SMTC Corporation

SMTC Corporation, founded in 1985, is a mid-size provider of end-to-end electronics manufacturing services (EMS) including PCBA production, systems integration and comprehensive testing services, enclosure fabrication, as well as product design, sustaining engineering and supply chain management services. SMTC facilities span a broad footprint in the United States, Mexico, and China.  SMTC services extend over the entire electronic product life cycle from the development and introduction of new products through to the growth, maturity and end-of-life phases. SMTC was recognized by Frost & Sullivan 2012 with the Global EMS Award for Product Quality, in 2013 for the North American Growth Leadership Award in the EMS industry, and 2016 for Customer Value Leadership Award.

SMTC is a public company incorporated in Delaware with its shares traded on the Nasdaq National Market System under the symbol SMTX.

 

Financial Performance

  • Revenues increased 11.9% to $37.1 million, compared to $33.2 million in the first quarter of 2017

  • Gross Profit of $3.9 million or 10.4% represents an increase of $0.3 million reported in the first quarter of 2017

  • Net income of $8 thousand, or $0.00 per share, an improvement of $385 thousand, compared to a Net Loss of ($377) thousand or $(0.02) reported in the first quarter of 2017

  • Adjusted EBITDA of $0.9 million represents a $1.2 million improvement compared to ($0.3) million in the first quarter of 2017

Revenue for the first quarter was $37.1 million, up 11.9% from $33.2 million in the first quarter of 2017. Sequentially, revenue decreased 3.9% from $38.6 million in the seasonally strong fourth quarter of 2017. The year-over-year increase from the first quarter of 2017 was the result of strong demand both from existing and new customers in 2018 and was well-diversified among the company’s target end-markets. $1.7 million of the increase of revenue in the first quarter was due to the impact of a new accounting recognition standard which was effective January 1, 2018.

Gross profit for the first quarter of 2018 was $3.9 million or 10.4% of revenue compared with $3.6 million or 10.7% of revenue for the same period in 2017. Adjusted gross profit, was $3.5 million or 9.5% as a percentage of revenue in the first quarter of 2018 compared to $2.3 million or 6.9% in the same period of the prior year. Gross profit in the fourth quarter of 2017 was $2.9 million or 7.5% and adjusted gross profit was $3.4 million or 8.9%.

Net profit was $8 thousand for the first quarter of 2018 compared to a net loss of $(377) thousand in the first quarter of 2017. The company reported a net loss of $(904) thousand in the fourth quarter of 2017.

Adjusted EBITDA was $0.9 million in the first quarter of 2018 compared to $(0.3) million for in the first quarter of 2017 and $1.2 million in the fourth quarter of 2017. The decrease in the first quarter of 2018 compared to the prior quarter is due to expected lower seasonal revenue in the first quarter.

 

Pursuing the EMS Market

SMTC's goal is to become a strategic player in the EMS market. The long-term industry trends towards outsourced manufacturing continue to be positive.  The worldwide electronics assembly forecast for 2013 to 2018 will strengthen and continue to show growth. The overall market demand for electronic products should remain stable throughout the forecast period as a result of continuous innovation throughout a variety of market segments. NVR expects overall market growth to remain reasonably healthy over the next five years.

The worldwide Market for Electronic Products by Market Segment 2013-2018.

Consumer, communications, and computer products will continue to be the leading segments driving the largest growth of the electronics industry. In 2018, the total industry is expected to exceed $1.7 trillion in annual assembly value (COGS), as consumption and replacement of electronic products continues and new products fuel demand. Outsourcing has become a critical element in keeping the electronics assembly industry expanding and driving costs to the margin each year a leading attribute in stimulating continuous consumer demand. The trend to move price-sensitive manufacturing to low-cost regions will impact the manufacturing footprint in the future market for all suppliers.

Overview

Global Electronics Manufacturing Services

SMTC specialize in low-mid volume/high-low mix electronics manufacturing services for the industrial & commercial, computing & networking, communication & instrumentation, consumer & high-tech electronics, medical & life science and power & energy markets.  With manufacturing locations in United States of America, Mexico and Asia, SMTC provides highly engineered electronics and electromechanical assemblies for regional and global manufacturing companies. With a reputation for innovation and flexibility, SMTC provides every customer with personally tailored business solutions, global logistics and a competitive edge in the marketplace.

Our Global Footprint

Delivering Low Cost Global Production and Local Manufacturing Support

With locations in USA, Mexico and Asia, SMTC operates a global footprint, specializing in customized delivery of localized electronics manufacturing and engineering support.

Low Cost Global Production

Regardless of our customers location, SMTC is positioned to provide customers global competitiveness. We help customers determine where to manufacture and how to best capitalize on low-cost global geographies by leveraging in-country sourcing. With our global supply chain, we are able to source quality materials in region that can reduce our customers total cost of ownership.

Local Manufacturing Support

We have established NPI technology centers, value engineering services and manufacturing facilities in strategic locations maintaining a successful business partnership with our customers in most overseas markets.

Maintaining a strong global footprint requires thought leadership, the right-fit, responsive customer service and proper alignment with the customers business strategy. SMTC understands what it takes to deliver a pragmatic, continuous approach to successful global footprint manufacturing.

Low-Mid Volume/High-Mid Mix

Specializing in Low-Mid Volume, High-Mid Mix Electronics

SMTC specializes in the production of low-mid volume, high-mid mix electronics built for the industrial & commercial, computing & networking, communication & instrumentation, consumer & high-tech electronics, medical & life science and power & energy markets. While many companies specialize in high volume production, we have developed an entire global business process founded on the support of low-mid volumes high-mid mix complex devices. Across our global facilities, SMTC manufactures almost a 1,000 different products annually with volumes ranging from 1 to 20,000 pieces per month.

SMTC is sensitive to your electronics manufacturing needs, which enables us to build personal relationships with our partners. We ensure that communication takes place throughout the entire process. In order to deliver highly complex variable demand electronics devices to the industrial & commercial, computing & networking, communication & instrumentation, consumer & high-tech electronics, medical & life science and power & energy markets, SMTC is able to fully understand and produce exactly what our customers need and want, providing peace of mind and a strong sense of partnership.

Specialty End-to-end Solutions

Comprehensive Electronics Manufacturing Solutions

Most electronics manufacturers focus on printed circuit board assembly (PCBA). At SMTC we do that and more. As a global low-mid volume, high-mid mix electronics manufacturer, SMTC provides full suite of integration solutions to meet the needs of original equipment manufacturers (OEM's) in the industrial & commercial, computing & networking, communication & instrumentation, consumer & high-tech electronics, medical & life science and power & energy markets worldwide. In addition to extensive printed circuit board assembly and specialty wire cable harness assembly capabilities, SMTC provides highly engineered end-to-end solutions through full system assembly and box build services.

While SMTC provides prototyping, front-end engineering and design solutions, our extensive test development capabilities range from industry standards to comprehensive, custom highly engineered systems. Through a comprehensive end-of-life component system, we maximize the cost of ownership and provide fulfillment and after-market services in order to help manage your supply chain needs.

And if that isn't enough, every day SMTC's experts from our facilities located around the world, work on hundreds of new products in different stages of the engineering and design. While other electronics manufacturers outsource engineering and design services or confine them to individual departments, we embed them into our entire proprietary New Product Introduction (NPI) process, which is covered by our global ISO9001and ISO13485 accreditations.

One size does not fit all. At SMTC we take the time and care to understand customer products and needs in order to deliver the best possible end-to-end solutions.

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